Credit cards to change

Airlines and online retailers are to be banned from levying “excessive” and opaque surcharges on card purchases next year, in a move being presented by the Treasury as a dose of Christmas cheer for struggling consumers.

Mark Hoban, Financial Secretary to the (UK) Treasury, announced just before the holiday break that excessive charges on all forms of payments – not just plastic cards – would be banned by the end of next year and that it would extend across most retail sectors including transport.  Charges would need to be shown up front.  His statement pre-empts moves by the European Union to achieve the same goal, but not due to become law until 2014.

The move follows a campaign by the consumer organisation Which?, which claims that airline passengers alone pay more than £265,000 a day in card surcharges.  It says that it costs between 10p and 20p to process a debit card payment, but that airlines and retailers often then add a much greater charge.  To compound the problem, this payment is sometimes not apparent until the very end of an online transaction.

The consumer group has singled out low-cost airlines for particular criticism.  Ryanair, for example, charges a £6 “administration fee” per person per sector for the use of debit cards.  This is the only practical way of purchasing a Ryanair ticket. www.hm-treasury.gov.uk/press_148_11.htm

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